Ladies and gentlemen, thank you for standing by. Welcome to Vericel’s Third Quarter 2015 Conference Call. At this time, all participants are in a listen-only mode. I would also like to remind you that this is call has been recorded for replay. I will now turn the conference over the Vericel’s Chief Financial Officer, Gerard Michel. You may begin.

Thank you, operator, and good morning everyone. Welcome to Vericel’s third quarter 2015 conference call to discuss our third quarter 2015 financial results as well as the progress of our commercial business and development programs. Before we begin, let me remind you that on today’s call, we will be making forward-looking statements covered under the Private Securities Litigation Reform Act of 1995, and all of our projections in forward-looking statements represent our judgments as of today. These statements may involve risks and uncertainties that are described more fully in our filings with the SEC, which are also available on our website. In addition, any forward-looking statement represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. With us on today’s call are Nick Colangelo, Vericel’s President and Chief Executive Officer; Dan Orlando, Vericel’s Chief Operating Officer; Dr. David Recker, our Chief Medical Officer and Dr. Ross Tubo, Vericel’s Chief Scientific Officer. I will now turn the call over to Nick.

Thank you, Gerard, and good morning everyone. Vericel had another strong quarter during which we continued to generate significant revenue growth in our commercial business, and made substantial progress in advancing our upcoming regulatory submissions for MACI and Epicel. From a commercial perspective, Total Carticel and Epicel net revenues for the third quarter were $11 million, representing a 19% increase over net revenues in the third quarter of 2014. For the nine months ended September 30, 2015, total Carticel and Epicel net revenues increased 18% over pro forma net revenues for the same period in 2014. The significant revenue growth we achieved during the third quarter was primarily due to very strong growth for Epicel, which has benefited from additional promotional support and [indiscernible] focused on increasing Epicel utilization in burns centers that previously used the product. Epicel revenues for the third quarter increased 83% over the third quarter of 2014, moreover the number of burn centers that placed orders for Epicel so far this year has increased nearly 40% compared to the number burn centers that placed orders for Epicel in all of 2014. These results demonstrate that our targeting strategy and investment and an expanded sales force are bearing fruit and enabling us to bring this important life-saving product to more patients. Carticel net revenues increased 4% during the third quarter. Our core orthopedic surgeon customer base remained solid, and were optimistic about the potential to continue to grow Carticel revenues. In addition physician interest in MACI is extremely high, which leads us to believe that MACI will hold an important place in the knee cartilage repair market. So we are very optimistic about the future of our cartilage repair franchise. In summary, our continued strong growth bodes well for the future of Carticel and Epicel, as we…

Thanks, Nick. Total revenues for the quarter ended September 30, 2015 were $11.3 million and included $7.7 million of net sales of Carticel implants and surgical kits, 3.3 million of net sales of Epicel and approximately $327,000 in sales from our marrow donation business. Total Carticel and Epicel net product revenues in the third quarter increased approximately 19% over third quarter net product revenues in 2014. For the nine months ended, September 30, 2015 total Carticel and Epicel net product revenues increased approximately 18% over pro forma net product revenues for the same period in 2014. Gross profit for the quarter ended September 30, 2015 was $4.5 million or 40% of total revenues. Gross profit for the quarter was reduced by 4% due to higher than normal inventory write-offs. R&D expenses for the quarter were $3.7 million versus $7.8 million for the same period in 2014. The decrease in third quarter R&D expenses is primarily due to a reduction in expenses associated with the ongoing ixCELL-DCM clinical trial and the $3.2 million payment to Verigen shareholders in 2014 pursuant to a settlement agreement that eliminated all future milestone payments related to the development and commercialization of MACI in the US partially offset by the addition of personnel and other expenses associated with Epicel, Carticel and MACI. Selling, general and administrative expenses for the quarter were $5.7 million compared to 4.3 million for the same period a year ago. The increase in SG&A expenses in the third quarter is primarily due to an increase in sales and marketing expenses associated with Carticel and Epicel, as well as strategic planning activities for MACI. Loss from operations for the quarter ended September 30, 2015 was $4.9 million compared to $8 million for the same period in 2014. Material non-cash items impacting the operating…

Thanks Gerard. In summary, our financial results reflect significant progress with our commercial business which is performing well in a very solid footing for sustainable long term growth. Our near-term priorities are to continue our commercial progress, submit the MACI BLA and after sell HDE supplement to the FDA by the end of the year, and complete the ongoing Phase 2b ixCELL-DCM clinical study with ixmyelocel-T. That concludes your prepared remarks. Now I’d like the operator to open the call to your questions.

[Operator Instructions] our first question comes from the line of Kevin DeGeeter with Ladenburg. Your line is now open.

Congrats on a nice quarter. A few questions for me; first off, in terms of the Carticel growth rate over the next couple of quarters, are you seeing any feedback from surgeons to suggest some of them may be waiting for MACI to come to market to before bringing certain patients in for surgery or perhaps certain surgeons who may be interested in trying or retrying Carticel, but because of impending launch of MACI may hold off.

Kevin, this is Dan. We have no sense of that at this point. I think it’s a bit premature. We haven’t even filed yet; upon the filing, of course that will create a lot of buzz, and as we get closer to an FDA conclusion of that filing, we may get some sense of that, so that could be later next year, early 2017. But at this point we have no sense that physicians are hesitating on Carticel.

This is Dave Recker, clinically it’s tough that make a – to ask a patient to wait over a year.

Sure. I was thinking more in the context of maybe surgeons who are not actively using Carticel at the moment, who [indiscernible] calling upon, and kind of how you target those folks. But it sounds like that continues kind of as to plan.

I’ll just say this Kevin, we’ve just kicked off our market research with physicians and of course we are talking with physicians who currently use Carticel and those that had used it in the past and don’t use it today and those who haven’t used it. The interest is extremely high in MACI and the advantages that it holds, but we don’t get any sense that they are really [banking] [ph] patients or holding off on Carticel. So especially the core physicians who have continued to utilize Carticel over now a decade demonstrate that consistency month in and month out.

Great, very helpful. And could you provide an update as to how to think about the timeline for the humanitarian device exemption filing for Epicel specifically once filed the process there is a bit different than definitely a standard kind of therapeutic review. What’s the realistic timeline for potential answer on that filing?

So this is, as Nick mentioned, this is submitted as a supplement to an HDE which is you have reminded this is a completely different mechanism for approval. Technically the FDA by law has 75 days to complete their review and give an opinion. Now that’s not been necessarily the experience that HDE supplements or HDE submissions have had in the past. And it depends on how the agency looks at this. We believe that the product is very, very safe in children that it obviously meets the standard of probable benefit, and we are hopeful that this will get a quick review.

Maybe one more from me and then I’ll get back in the queue. Specifically with regard to the BLA filing for MACI do you anticipate being able to seek a small company exemption from that fee or should we think about that fee falling in the fourth quarter here.

We have looked at every single angle we can possibly come up with and I don’t think we can get an exemption. Offline I can tell you that, I don’t want to bore everyone with the details on that, but offline we could chat through the avenues we’ve looked at. But I think you can bank on that roughly $2.4 million fee being paid by us unfortunately.

[Operator Instructions] our next question comes from the line of Chad Messer of Needham. Your line is now open.

Hi, this is Esther in for Chad. Thanks for taking my question and congrats on the quarter. I just had a question about Carticel’s sales in the past and going forward. Do you see any competition from other products in the pipeline that are taking away from Carticel sales, for example NeoCart or NovoCart 3D. Do you see physicians going to those instead of Carticel?

This is Nick, and I’ll take a first stab at it and then Dan can add as well. There really are not any current ACI competitors for Carticel. Certainly there are ongoing clinical studies for NovoCart and NeoCart and they are targeting our target patient population and that may have a bit of an impact on Carticel usage. But again with the great work that Dave and his team did to secure a path to submit our BLA, we believe we’ll be first to market with the next generation product, and we feel like we are really well positioned in that regard.

And one more, do you see still expect the ixCELL-DCM trial to read out early ’16?

We are well on track, as you know, our last patient was enrolled February 04, 2015 this year. We are actively pursuing all of the remaining data and hope to have our results available by early next year.

And our next question comes from the line of Kevin DeGeeter of Ladenburg. Your line is now open.

Just one more from me as a follow-up to the last question. What is your current thinking with regards to potential next steps for the ixCELL-DCM program, specifically if you’re fortunate to have a positive outcome, do you anticipate moving forward to Phase 3 under the Vericel spending or would you more likely than not look to partner that program.

Well, I’ll start with that one again Kevin. We think with positive results in the ixCELL-DCM program or specifically the study that, that will create a lot of great options for the company we do have preliminary plans in place for what the next steps for our phase 3 program would look like, but we certainly would explore whether it make sense with this orphan program to move forward on our own or to seek partnership obviously heart failure represents a significant unmet need, there’s a lot of interest in the area and we certainly would explore all avenues before we made a decision on that.

[Operator Instructions] And I am showing no further questions at this time.

Okay, well, thank you everyone for your questions and continued interest in Vericel. We are really excited about the opportunities that lie ahead for the company, and we look forward to reporting our progress to you again on our next call. So have a great day and thanks again.

Ladies and gentlemen, thank you for participating in today’s conference. That does conclude today’s program, you may all disconnect. Have a great day everyone.